'No more doubt': Micron surges 14% after-hours on blowout earnings

US memory chipmaker Micron posted results that far exceeded market expectations Wednesday, sending its shares surging more than 14 percent in after-hours trading.

Micron said Wednesday that fiscal third-quarter sales climbed 346 percent year-on-year to $41.46 billion, topping the market consensus of $34.5 billion by roughly 20 percent.

Adjusted earnings per share jumped 1,252 percent year-on-year to $25.10, well above the market estimate of $20.40. Demand for HBM and server DRAM, fueled by AI data center buildouts, drove the strong results.

The company's guidance for the next quarter also cleared market expectations with ease. Micron projected sales of $49 billion to $51 billion and EPS of $30 to $32, both above the consensus estimates of $42.5 billion in sales and $25.20 in EPS.

Micron said its sixth-generation HBM4 is being deployed in volume across customer platforms, and that mass production of the seventh-generation HBM4E is on track to begin next year.

Among the highlights of the earnings release, investors paid closest attention to long-term supply contracts, known as SCAs. Micron said it has signed 16 such agreements as part of a structural shift in its business model.

The company said remaining performance obligations on 14 of the 16 contracts total approximately $100 billion. It also projected that, if all agreements are fulfilled as planned, the contracts will account for roughly 40 percent of total sales.

"We expect memory supply shortages to persist through the end of 2027," CEO Sanjay Mehrotra said. "Even if supply gradually improves from 2028, it is difficult to predict when demand will catch up."

Micron shares closed down 0.3 percent in regular trading Wednesday before surging more than 14 percent in after-hours trade to around $1,199 following the earnings release.